10 Reasons Why ATandT Should Fear a Verizon iPhone

News Analysis: Speculation abounds over the possibility of Apple bringing the iPhone to Verizon Wireless in the coming months. But AT&T isn't fazed by that possibility. And it believes its business will be just fine. Unfortunately for AT&T, that belief might be faulty.

In statements made at a recent JP Morgan investors conference, AT&T CEO
Ralph de la Vega said that his company isn't concerned over the possibility of
Apple bringing the iPhone to Verizon Wireless. He said that in his experience
in the industry, most consumers are loath
to switch from one carrier to another because of how difficult it is to do
so. Furthermore, he said that because 70 percent of
subscribers are on family plans, he doubts that his company would witness a
mass exodus to Verizon Wireless for the same phone they can have on AT&T's
network.
To some extent, his comments make sense. After all, if Apple
releases the iPhone 4G on Verizon's network, chances are it will also be
available on AT&T's network at the same time. And in other countries where
the iPhone is available on multiple carriers, they both are seemingly doing
well enough to continue selling the device on their networks.

But that doesn't mean there aren't risks involved. AT&T isn't the most
beloved company in the world, and it's competing in a market where consumers
are naturally suspect of providers. If Apple decides to give those consumers a
choice, it could spell trouble for AT&T. And it's time that de la Vega
realizes that. Here's why:

1. Verizon is the other big player
AT&T is undoubtedly a major player in the mobile phone market. But Verizon
Wireless is the company's biggest and most successful competitor. And the phone
they're fighting over is the most coveted device in the space. By offering the
iPhone to the
millions of Verizon Wireless subscribers, Apple will expand its market
dramatically. For AT&T, the upside just isn't there. Now, it will be forced
to compete with a much stronger competitor that is already doing a fine job
competing. That's troublesome.
2. The iPhone can get people to switch

AT&T has been quick to point out that consumers are typically unwilling
to switch from one carrier or another. And in most cases, that's true. But when
it comes to the iPhone, all bets are off. Apple's smartphone has shattered all
preconceived notions about the way the mobile industry works. Millions of folks
from around the world switched to other carriers just to get their hands on
Apple's smartphone. And although the allure of the iPhone has worn off
somewhat, having the ability to go to another carrier with the device might
reignite that excitement. Watch out, AT&T. More folks might switch than you
think.
3. AT&T isn't the most beloved company
Although AT&T has done better in the last few years appealing to
customer desire, the company still has an uphill battle ahead of it when it
comes to customer satisfaction. Of course, that's the same with any wireless
provider in the market. It seems that when it comes to mobile phones or the
cable industry, consumers just aren't as satisfied as they could be. But that
could come back to haunt AT&T. Disgruntled customers who are tired of its
policies might choose to go to Verizon Wireless and use the iPhone. Right now,
they have nowhere to go. But if they are given an option, more customers might
leave than AT&T thinks.
4. Apple's preference will matter
By making the iPhone available on multiple carriers, Apple will have the
ability to decide if it wants to give one company a head start over the
competition. Maybe
Apple will like to work with Verizon Wireless more and offer the company an
earlier release. Maybe it will offer a few extra features in a Verizon phone
that it won't include in an AT&T device. At this point, there's no telling
what Apple would do with its two carriers, but AT&T should be concerned.

Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.